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DECISION No. 09/2005/QD-BTC OF JANUARY 21, 2005 ON THE ISSUANCE OF GOVERNMENT BONDS, PHASE III, IN 2005, FOR INVESTMENT IN A NUMBER OF IMPORTANT TRAFFIC AND IRRIGATION WORKS IN THE COUNTRY

THE MINISTER OF FINANCE

Pursuant to the Government’s Decree No. 77/2003/ND-CP of July 1, 2003 defining the functions, tasks, powers and organizational structure of the Finance Ministry;

Pursuant to the Government’s Decree No. 141/2003/ND-CP of November 20, 2003 on the issuance of Government bonds, Government-underwritten bonds and local-administration bonds;

Pursuant to the Prime Minister’s Decision No. 235/2003/QD-TTg of November 13, 2003 defining the functions, tasks, powers and organizational structure of the State Treasury attached to the Finance Ministry;

Pursuant to the Prime Minister’s Decision No. 182/2003/QD-TTg of September 5, 2003 on the issuance of Government bonds for investment in a number of important traffic and irrigation works of the country;

At the proposal of the general director of the State Treasury,

DECIDES:

Article 1.- To issue Government bonds, phase III, in 2005, for investment in the construction of a number of the country’s important traffic and irrigation works with a total amount of VND 10,000 billion and USD 30 million.

Article 2.- Government bonds (hereinafter called bonds for short) shall be issued and paid in Vietnam dong and US dollar, in form of certificates or book entries.

Vietnam dong-bond certificates include registered bonds and bearer bonds, preprinted with the par values of VND 100,000, VND 200,000, VND 500,000, VND 1,000,000, VND 2,000,000, VND 5,000,000, VND 10,000,000, VND 20,000,000, VND 50,000,000 and VND 100,000,000.

Foreign currency bonds shall be issued in form of book entries.

Article 3.- Modes of bond issuance:

3.1. Direct issuance via the State Treasury system:

Vietnam dong bonds shall be issued at the State Treasury units throughout the country.

a/ Bond buyers include Vietnamese organizations and citizens; overseas Vietnamese; foreigners working and residing in Vietnam; foreign organizations operating in the Vietnamese territory, except for subjects being underwriters and bond bidders (including those involved in Vietnam dong- bond bidding via Securities Trading Centers).

Vietnamese organizations must not use funds allocated by the State budget to buy bonds.

b/ Bond term: 5 years.

c/ Bond interest rate: To be decided by the Finance Minister at the time of issuance.

d/ Issuance duration: From August 1, 2005 to before September 30, 2005.

3.2. Vietnam dong-bond bidding via Ho Chi Minh city and Hanoi Securities Trading Centers (hereafter referred collectively to as Securities Trading Centers):

a/ Bond bidders are members of the bond bidding market via Securities Trading Centers. Organizations and individuals that wish to buy bonds through bidding shall register with the members of the bond bidding market and organizations entitled to conduct transactions on the stock market.

b/ Bond terms: 5 years and 10 years.

c/ Bond interest rates: To be based on the bidding results.

d/ Issuance duration: From February 10, 2005 to before December 15, 2005.

3.3. US dollar-bond bidding via the State Bank’s transaction office:

a/ Subjects entitled to participate in bond bidding are Vietnam-based credit institutions licensed to deal in foreign exchange and have foreign currency accounts opened at the State Bank.

b/ Bond terms: 5 years and 10 years.

c/ Bond interest rates: To be based on the bidding results.

d/ Issuance duration: From February 10, 2005 to before December 15, 2005.

3.4. Underwriting for issuance of Vietnam dong bonds

a/ Subjects entitled to participate in bond issuance underwriting are organizations licensed to underwrite bond issuance under current regulations.

b/ Bond terms: 5 years and 10 years.

c/ Bond interest rates and underwriting fees shall be agreed upon between issuance-underwriting organizations and the State Treasury according to the current prescribed regime.

d/ Issuance duration: From February 10, 2005 to before December 15, 2005.

Article 4.- Principles and modes of payment of bond principals and interests

4.1. Bonds shall be paid in the currency in which they have been issued.

4.2. Bonds in Vietnam dong:

- Bond issued via the State Treasury (retailed), bearer, with preprinted par values, shall be paid at the State Treasury units throughout the country.

- Bonds issued via the State Treasury (retailed), registered, with preprinted par values, shall be paid at the State Treasuries where they have been issued.

- Bonds bid at Securities Trading Centers, with issuance underwriting and listed at Securities Trading Centers, shall be paid jointly by the Securities Trading Centers and the State Treasury.

4.3. Bonds in US dollar:

The State Bank’s transaction office shall act as an agent for the Finance Ministry in the issuance and payment of bonds.

4.4. Payment of bond principals: Bond principals shall be paid in a lump sum upon the bonds’ maturity.

In cases where owners of bonds (registered) being individuals meet with special difficulties or force majeure circumstances and wish to have their bonds paid before maturity, if they get certification from the local administrations of their residential places or competent authorities, the general director of the State Treasury shall consider and allow the repurchase of bonds before their maturity. No interests shall be paid for immature bonds.

4.5. Payment of bond interests: Bond interests shall be paid once a year after full 12 months counting from the date of their purchase.

When the bond principal or interest payment is due, if the bond owners fail to come up for payment, such bond principal or interest amounts shall be kept for payment to the bond owners when they need; the accrued interests and interests arising in the post-maturity duration shall not be calculated.

Article 5.- Bond owners shall enjoy the following rights and preferences:

5.1. To transfer, donate, bequeath or mortgage bonds in credit relations.

5.2. To buy, sell and deal in bonds via Securities Trading Centers, with regard to bonds listed at Securities Trading Centers.

5.3. Bond owners being credit institutions may deal in bonds on the monetary market; discount and rediscount bonds according the State Bank’s regulations.

5.4. Bond owners being individuals shall be exempt from personal income tax on the incomes from bond interests and bond sale/purchase price differences; and if wishing, they may leave their bonds at the State Treasury units for preservation free of charge.

Article 6.- The general director of the State Treasury shall have to:

6.1. Organize bond issuance and payment according to the provisions of Articles 3 and 4 of this Decision.

6.2. Take initiative in monitoring bond volumes, terms and interest rates according to the bidding and underwriting modes prescribed at Points 3.2, 3.3 and 3.4 of this Decision, within the volume, term and interest rate bracket approved by the Finance Minister and suited to the capital-use demand.

6.3. Conduct book-keeping accounting, make reports and final settlement of bond revenues and payments according to the prescribed regime.

Article 7.- This Decision takes effect 15 days after its publication in the Official Gazette.

The general director of the State Treasury shall guide in detail and direct the implementation of this Decision in the entire State Treasury system; the heads of the concerned units under and attached to the Finance Ministry; the directors of the provincial/municipal Finance Services and State Treasuries shall have to implement this Decision.

Minister of Finance
NGUYEN SINH HUNG